The Drug Enforcement Administration's
Control Over Weapons and Laptop Computers

Report No. 02-28
August 2002
Office of the Inspector General

FINDINGS AND RECOMMENDATIONS

II. MANAGEMENT CONTROLS

We noted significant deficiencies with the DEA's Fixed Asset Subsystem (FAS) property inventory, which controls most of the laptop computers in use by the DEA. These deficiencies are
attributed to problems resulting from the DEA's October 2000 conversion to the FAS, failure to follow established policies and procedures, and the lack of integration between the property
system and the financial system to ensure all laptop computer purchases are captured in the inventory. In addition, we found the following significant internal control weaknesses: (1) physical
inventories were not adequately performed or conducted according to DEA policy; (2) individuals with actual control of the laptop computer were not recorded in FAS; (3) Property Custodial Assistants
(PCAs) were not always notified of newly acquired laptop computers; (4) hand receipts were not used systematically throughout the DEA; and (5) clearance records for separated employees contained
insufficient detail.

Control weaknesses with the DEA's weapon inventory controls were also present. The database used to track weapons does not provide an adequate audit trail, was not fully integrated
with the financial system, and was heavily dependent upon the manual submission of property records to the Firearms Training Unit (FTU). In addition, we found that: (1) weapon purchasing
and receiving functions at the FTU were not segregated; (2) physical inventories were not performed annually as required, nor were FTU duties in this area segregated; (3) clearance records for
separated employees contained insufficient detail; and (4) confirmations for excessed weapons were not obtained from law enforcement agencies.

We assessed the DEA's compliance with OMB Circular A-123, Federal Property Management Regulations, and Department and DEA policy and guidance. Our review included an evaluation of the
controls over weapons and laptop computers at headquarters and four field locations. We obtained background information on the DEA's automated systems and reviewed the DEA's
procedures for automated systems, purchases, receipt and assignment, physical inventories, and disposal of accountable weapons and laptop computers. We also tested, on a sample basis, the
accuracy and reliability of DEA property records. The universe of weapons and laptop computers assigned to the locations we audited is displayed in Appendix IV, Table 1. In total, we
reviewed 392 items, as summarized in the table that follows and detailed in Appendix IV, Table 2.

TOTAL ITEMS REVIEWED

DEAHeadquarters

Quantico

AtlantaFieldDivision

BostonFieldDivision

SanDiegoFieldDivision

TOTALS

WEAPONS

18

96

28

28

38

208

LAPTOP COMPUTERS

53

53

21

22

35

184

TOTALS

71

149

49

50

73

392

Automated Systems

Weapons: The Weapons Database was created by the DEA using off-the-shelf software and is considered by the DEA as its official system to record and manage its weapon inventory. The Weapons Database includes information on each weapon such as the make, model, serial number, custodian, location, acquisition date, cost, and status.

The FTU is responsible for entering new weapons and making changes to the existing Weapons Database, such as the location of the weapon and the agent assigned. The Unit Chief, Chief Armorer, and nine Firearms Instructors of the FTU have access to the main database. The Primary Firearms Instructors (PFI) in field offices do not have access to the main database, but instead are e-mailed a database file that details the weapons recorded for their field division. The PFI is required to make changes to a weapon's status on a DEA-17,17 Firearms Control Record, and sends the DEA-17 to the FTU for input into the database. According to written guidance from the FTU, DEA-17s may be sent in quarterly.

In FY 2001, the DEA began replacing its automated weapons tracking system, which was part of the M-204 property system, with the Weapons Database. Representatives of the FTU stated that the M-204 system was unreliable and that the new database provided better controls. The Special Agent in Charge (SAC) responsible for the FTU commented that the current database was the best system available for the DEA and meets management needs.

However, the new system employed by the DEA raises concerns over internal controls, segregation of duties, and whether the system is suitable in the long term for an entity with worldwide locations and 15,000 weapons in use. In our judgment, inventory data will not be timely or accurate with the new system. The data entry procedure now in place relies solely on the manual submission of the DEA-17 to the FTU from DEA locations worldwide, and the subsequent input of the information into a database by the FTU staff. To illustrate the present timing problem, we observed that an agent had transferred 6 months prior to our fieldwork; however, the weapon was not assigned to the new field division's weapons inventory. Our review found that the DEA-17 was never submitted, even though DEA Firearms Policy states that agents, upon transfer, are required to provide the gaining office's PFI with their property files within 10 days of reporting to their new office. This error would not have been caught by the DEA until an annual firearms inventory was completed.

We also observed that the new system does not track the edits made to the inventory records contained in the database nor does it provide an automated exception report. This internal control step is necessary to provide management with an audit trail of all edits made, thereby safeguarding the data from unauthorized additions and deletions.

The incorporation of an electronic tracking option for the weapons inventory would offer greater audit trail controls and help eliminate discrepancies in inventory records and provide a source for reviewing the history of a weapon's assignment.

Finally, the DEA does not have a users manual for the Weapons Database. A users manual would provide operators with a reference source and ensure consistency in the implementation of procedures. Other issues that relate to the Weapons Database internal controls and segregation of duties are discussed in later sections of the report.

Laptop Computers: The FAS is used by the DEA for tracking laptop computers that are assigned to DEA staff worldwide. The FAS contains property information such as asset number, serial number, manufacturer, model number, acquisition cost and date, name of PCA, physical location, status, and property condition. The FAS does not, however, identify the specific individual to whom the laptop computer is assigned. By contrast, TEIS, which is used to track laptop computers assigned to technical staff, does identify the individual to whom the item is assigned.

We were unable to sufficiently test the accuracy and reliability of the FAS inventory as it pertained to the control of laptop computers in use. At the time of our audit, the DEA was having significant problems with the accuracy of the FAS inventory data. According to the DEA, numerous data problems were encountered with its inventory
after the October 2000 transfer of data from the M-204 property management system into FAS. The DEA believes the problems resulted from inadequate verification of M204 data prior to the conversion, misclassification of items, discrepancies in location identifiers, and errors in the status of interoffice and intra-office transfers. After encountering this problem, the DEA began an agency-wide property reconciliation. At the completion of our audit fieldwork, the DEA still had not completed its reconciliation. The chief of the Property Unit has since informed us that the reconciliation is complete and 229 laptop computers were determined to be unaccounted for.

Reconciliation to Financial System

According to the Joint Financial Management Improvement Program (JFMIP) Property Management Requirement, the goal of all system interfaces is to facilitate reconciliation between management and financial systems to ensure data accuracy. JFMIP stresses that inventory data entered at a single point of entry should simultaneously populate all databases (financial and management). We determined that the DEA's financial system is not fully integrated with either the Weapons Database or FAS, the systems do not automatically verify the item actually purchased with the item placed into inventory. Instead, the system relies on a manual reconciliation by the PCA at the individual financial transaction level. This control procedure decreases the level of reliability of the data in the two systems, since the reconciliation is based on the initiative of the PCA to investigate what property was purchased. In our judgment, the reconciliation of the property and financial system of weapons and laptop computers should be performed electronically as a single point of entry.

Purchases

Weapons: The procurement of all new weapons is centralized and coordinated by the FTU. The Chief of the FTU is required to complete a DEA-19, Requisition for Equipment, Supplies, or Services, whenever weapons are needed. Then the Special-Agent-In-Charge (SAC) and the Administrative Officer must approve the DEA-19. The approved request is then forwarded to a contracting officer at DEA headquarters. According to the SAC at the FTU, the request is sometimes accompanied by a cover letter explaining the reason for the purchase. An approved DEA-19 is used as the basis to obligate funds. The Contracting Officer then approves the order and completes the purchase by preparing an order form.

Laptop Computers: Laptop computer purchases are decentralized at the DEA. Offices are allowed to use government credit cards or purchase orders for the acquisitions. The DEA states that whenever laptop computers are purchased at DEA headquarters, a request for laptop computers is submitted; the requesting division submits its request to the Information System Division (SI) for approval. Funds are transferred for the purchase to the SI cost center.18 Once the request is approved, SI's Acquisition Management Section receives the request and orders the item. Whenever field divisions purchase laptop computers, the requestor prepares a DEA-19 for the approval of the purchase. The Assistant Administrative Officer at the field division requests approval of the purchase from DEA headquarters and then obligates the funds required to make the purchase. The item is then either purchased directly by the cardholder or by the Administrative Officer through a purchase order.

Weapons and Laptop Computers Purchase Sample - We judgmentally selected 60 weapons and 74 laptop computers from vendor invoices to determine if the weapons or laptop computers purchased were recorded in the Weapons Database and the FAS. Details of our sample, by location, are as follows.

ITEMS SELECTED FROM PURCHASE DOCUMENTS

DEAHeadquarters

Quantico

AtlantaFieldDivision

BostonFieldDivision

SanDiegoFieldDivision

TOTALS

WEAPONS

0

60

0

0

0

60

LAPTOP COMPUTERS

25

26

4

5

14

74

TOTALS

25

86

4

5

14

134

Our tests revealed that all purchased weapons in our sample had been recorded in the Weapons Database. With the exception of one laptop computer, all purchased laptop computers sampled had been entered into the FAS. We physically located the laptop computer, and as a result of our finding, the PCA entered the item into the FAS. In our judgment, the lack of integration and automated reconciliation between the financial and property systems, which we discussed in the Automated Systems section of this report, contributed to this condition, as did the lack of management oversight to ensure compliance with established DEA policy.19 Also, failure to record property timely in the official property system timely increases the risk of loss, because theft or misappropriation could go unnoticed.

Receipt and Assignment

Weapons: All weapons purchased are either shipped to the FTU or the Justice Training Center in Quantico, Virginia. According to the Chief Armorer at the FTU, he receives all weapons, counts them, and records their serial numbers on the shipping receipts. Then, the Chief Armorer matches the serial numbers on the weapons to the serial numbers on the packing slip or invoice. Afterwards, the Chief Armorer prepares a handwritten list, by serial number, of weapons received. He then attaches the list to the packing slip as part of the package that is sent to the Administrative Officer for processing the payment. Finally, the packing slip or invoice is stamped to indicate that the weapons are accepted and meet the specifications of the obligating document.

Weapons are entered into the database by the Chief Armorer with a status of "office use"20 until they are received by a designated individual or field division. Once a weapon is issued to an individual at a field division, a DEA-17 is to be completed and forwarded to the FTU. The FTU uses the DEA-17 to update the database with the assigned individual's name.

In our judgment, the duties for receiving and entering weapons into the database are not adequately segregated. The Chief Armorer was the person who not only received the weapon, but also verified the completeness of the shipment and entered the serial number into the database. According to the DEA Chief Financial Officer (CFO) bulletin dated June 5, 2001, an individual should not control all aspects of a transaction. Without dividing the key duties of authorization, data entry, and custody of assets, there is a greater risk that error or fraud could occur.

Laptop Computers: Laptop computers purchased by DEA Headquarters are received at the DEA warehouse. Warehouse personnel are responsible for ensuring the purchase is received in good condition and the vendor complied with the specifications of the purchase agreement. Discrepancies are noted on the shipping document and reported to the vendor for resolution. Within 10 days of receipt of accountable property, the PCA at the designated warehouse is required to assign a DEA property number to each item and enter the item in FAS. The warehouse PCA must coordinate with the SI office to arrange for the delivery of the ordered property. Whenever requests are made for a laptop computer by a field division or unit within DEA headquarters, the laptop computer is charged to the respective division or unit cost center and forwarded to the local PCA.

When the field division receives a laptop computer, the local PCA is responsible for obtaining the invoice, packing slip, and receipt if the item was purchased locally with a credit card. Similar to warehouse personnel, the PCA matches these documents to the purchase order. Within 10 days of receipt, the PCA affixes a DEA property number to the property and prepares a DEA-16,21 Receipt for Property Card, which lists the purchase order number, the DEA number, and property serial number. The PCA should then enter the property into FAS, and stamp and initial the DEA-16. If DEA headquarters executed the purchase, the local PCA must ensure the laptop computer was already entered into FAS before accepting the laptop computer into the local inventory.

Our review in this area found that the FAS does not list laptop computers by name of the individual assigned, but according to the name of the PCA. Generally, a DEA-12,22 Receipt for Cash or Other Items, is used by the PCA to document the assignment of a laptop computer to an individual.
The JPMR states that property custodians are responsible for the day-to-day support of the personal property management program, such as maintaining current records for accountable property within
the assigned custodial area. However, we found the DEA policy does not specify how individually assigned property must be tracked. Instead, the tracking method used is left to the
discretion of the PCA.

In our judgment, the FAS should include the names of the individuals who have physical custody of the laptop computers for an extended period. This information offers better controls over the accountability of laptop computer assignments. Also, inclusion of this information would reduce the risk of laptop computers being mishandled, lost, or passed from one individual to another without the FAS being updated. Management would have an accurate inventory at any given time without having to research each item in question.

We also found that field division PCAs do not always receive notifications of property transfers that take place within their division. PCAs at two field divisions we visited indicated they sometimes did not receive a copy of purchase orders executed by DEA headquarters on behalf of a sub-office.23 Under these circumstances, property received at a sub-office might not be entered into the property system until the PCA at the sub-office forward the invoice to the field division PCA. Also, laptop computers assigned to agents during basic agent training at the DEA Justice Training Center remained with the agent after they leave. When these agents reported for duty at their assigned field divisions, they sometimes did not notify the field division PCA they had a laptop computer. In our judgment, the DEA should ensure that PCAs are systematically informed of all new items for which they are held responsible in order to maintain adequate controls of their inventory.

Inventory Testing - To test the accuracy and completeness of the assignment of weapons and laptops computers in the property records, we attempted to physically verify the existence of selected weapons and laptop computers appearing in the Weapons Database and FAS. In addition, we selected a sample of weapons and laptop
computers found at each location visited and attempted to reconcile the item to the Weapons Database and FAS. In total, we physically inspected 258 items (148 weapons and 110 laptop computers), as shown in table that follows on the next page. Details of our sample, by property type, location and type of test, appear in Appendix IV, Tables 3 and 4.

ITEMS PHYSICALLY INSPECTED ON-SITE

DEAHeadquarters

Quantico

AtlantaFieldDivision

BostonFieldDivision

San DiegoFieldDivision

TOTALS

WEAPONS

18

36

28

28

38

148

LAPTOP COMPUTERS

28

27

17

17

21

110

TOTALS

46

63

45

45

59

258

Of the 148 weapons sampled, we found that one weapon presented to us by an agent was actually assigned in the Weapons Database to another agent. The DEA could not explain the discrepancy. Also, we identified two weapons physically located in an on-site weapon vault that were incorrectly recorded in the inventory records. One weapon was not assigned to the field division's inventory (the weapon was in the Weapon Database) and the other weapon was still shown as belonging to the FTU. We reviewed a copy of the DEA-17 prepared by the field division PFI for both of the weapons and found they were dated August 2, 2001, and August 3, 2001, respectively; however, the inventory had not been updated by the FTU in over three months.

Of the 110 laptop computers sampled, we found that 15 resulted in discrepancies with the inventory data. In seven instances, the serial numbers for the laptop computers did not match the serial numbers associated with the DEA property numbers recorded in the FAS. Also, we were unable to match the serial numbers found on two laptop computers to the FAS because the manufacturer's identification number had been entered instead of the serial number. In addition, two laptop computers did not have DEA numbers. Further, we found that one laptop computer did not appear in the FAS and three laptop computers were not in the possession of the persons assigned on the property card. We found that one of these laptop computers was in the custody of another individual and the other two were located in the work area from which the individuals had transferred. In our judgment, the above discrepancies point to a lack of internal controls and a failure by DEA employees to adhere to established policies and procedures.

Transfer of Property

Weapons: FTU Representatives stated that to track weapons the FTU sends to field divisions, they change the weapon's status in the database to "for issue"24 and assigns the weapon to the receiving field division's inventory. Also, the FTU sends a DEA-12, Receipt for Cash or Other Items, along with the weapon shipment. Upon receipt of the weapons, the field division PFI signs and returns the DEA-12 to the FTU. The PFI also completes a DEA-17 and sends it to the FTU to validate the transfer and identify to whom the weapon is assigned. The FTU uses the DEA-17 to update the Weapons Database. Also, the PFI and agent retain a copy for their records.

Weapons that are transferred between DEA offices are normally sent via Federal Express. The sending PFI notifies the receiving PFI of the transfer by e-mail or telephone, and provides the Federal Express tracking number. The sending PFI prepares a DEA-12, which serves as a packing slip and a temporary custody document. Once the weapon is received, the receiving PFI signs the DEA-12 and sends it back to the sender. Within about 30 days, the receiving PFI is required to send a DEA-17 to the FTU to document the weapon's permanent custody.

As noted earlier in the report, the accuracy of the Weapons Database relies on the timely submission of the DEA-17. Until the DEA-17 is received by the FTU, a weapon that has physically transferred to another DEA office appears on the Weapons Database as being in the custody of the sender. When we performed our inventory testing, as noted above, we found instances where items transferred were not reflected in the inventory timely.

Laptop Computers: DEA officials stated that the use of a DEA-12, DEA-16, or DEA-29 is required for the transfer of all accountable property, which includes laptop computers, made from DEA headquarters to other DEA units. When property is transferred between divisions, there is no similar requirement. The sending PCA is only required to notify the receiver of the transfer via e-mail or telephone.

Within FAS, when items are transferred from DEA headquarters to other units, the item is identified as "pending receipt." When the item is transferred from one division to another, the sending PCA is identified as the custodial officer and that the property is designated as "in transit." After the item is physically present, the receiving PCA is required to enter a "Y" in FAS by the transferred item. At that point, the receiving PCA becomes the custodian of the property.

We observed two weaknesses in this area. The first weakness we observed was that the DEA lacks a strict requirement to use hand receipts for both the transfer of property between field divisions and for the assignment of property within the division. Hand receipts are prepared only at the discretion of the PCA. In our judgment, without the use of hand receipts, controls are inadequate to document who has actual custody of the property. Furthermore, the use of hand receipts would help to resolve conflicts in the event a property transfer is not completed as planned by providing an audit trail (the DEA's policy states that the non-acceptance of transferred assets must be resolved between DEA field
divisions).

The second weakness we observed was that DEA Headquarters does not always notify the divisional PCA when a laptop computer is sent directly to individuals in their division. The PCAs at two locations we reviewed, told us they did not realize that laptop computers purchased at DEA headquarters belonged in their divisional inventory
until the biennial physical inventory was conducted. In our judgment, DEA headquarters should follow the same procedure of e-mail or telephonic notification that is required of the field
divisions when they transfer property.

Separated Employees

DEA guidelines require departing DEA employees to complete an Employee Clearance Record (DEA-171a)25 certifying that all DEA property has been returned. The "Security Activity" section of the form addresses weapons. The "Immediate Supervisor" section addresses personal custody property items, which would include laptop computers. The separating employee must obtain signatures of the responsible officials (e.g., PFIs and PCAs) on the Employee Clearance Record.

Weapons: Although weapons were found to be a category listed on the DEA's Employee Clearance Record, we found that details of the weapon are not included on the form, such as serial numbers or property descriptions. As discussed in Finding I, a weapon that was last assigned to an agent that had resigned was unaccounted for. The agent claimed to the DEA that he had returned the weapon with his other DEA property. We also observed at one location that a retired agent had returned a weapon during the exit process; however, the Weapons Database showed that the weapon was still assigned to the agent. Had the weapon been lost, missing, or stolen, the retired agent could have been erroneously held accountable. In our judgment, the weapons category on the Employee Clearance Record should be expanded to include more details on the returned weapon. If the location of a weapon is in question, the Employee Clearance Record would show what property had been returned.

Laptop Computers: Similarly, we found that the DEA's Employee Clearance Record did not identify laptop computers as a sign-off item or provide details of what accountable property was retrieved from an employee who leaves the DEA. As noted earlier, the FAS does not include laptop computer assignments by individual, and the tracking of an individual's property assignment is dependent upon the PCA maintaining adequate property records. These conditions increase the need for additional accountability controls and the need to include this information on the clearance record. The TEIS database does list laptop computer assignments by individual; however, we noted one instance in which an employee who left the DEA was still listed as the custodian for a laptop computer that he had returned prior to separation. In our judgment, this was an isolated instance that resulted because the TEIS database was not updated timely. DEA staff located the laptop computer and corrected the TEIS database as a result of our finding. As we noted above regarding weapons, controls over returned laptop computers would be enhanced significantly by including on the Employee Clearance Record what type of personal property was returned, and its DEA property number.

Physical Inventories

Weapons: According to the DEA Firearms Policy, annual physical inventories of all weapons are required. SACs, Lab Directors, and DEA headquarters managers are required to designate an impartial party to inventory weapons and "office use" weapons in each division annually. The policy further states that someone at a higher grade, other than the PFI, should perform the annual inventory.

DEA records showed that not all weapons were physically inventoried in FY 2000. We found as much as 13 years had elapsed since two weapons were inventoried. This occurred because DEA staff did not follow established policy and relied on the physical inventory conducted during an agent's annual firearms qualification. We also found that the system for conducting a physical inventory and inventory reconciliation did not ensure adequate segregation of duties at the FTU. The Unit Chief and secretary of the FTU performed the physical inventory, while the Chief Armorer performed the inventory reconciliation. However, both the Unit Chief and Chief Armorer were able to modify the Weapons Database. In our judgment, lack of segregation of duties increases the risk of fraud or abuse, and DEA headquarters' current procedures for conducting physical inventories could allow discrepancies to go undetected for years.

Laptop Computers: DEA policy requires biennial physical inventories of accountable property, alternating every other year between DEA headquarters and field divisions. DEA policy also requires that PCAs should not be involved in the physical inventory of accountable property, and staff who perform physical inventories or inventory reconciliation cannot have access to the property management system. Based on our review, we found several deficiencies in this area, as noted below.

First, we noted that the physical inventories were not being conducted biennially as required and were not validated by headquarters. The physical inventory scheduled in 1999 was canceled because of technical problems DEA headquarters had found with the M-204 system; the inventory was postponed until 2000. Because inventories are
performed biennially, this situation resulted in a significant period of time where locations did not have a valid inventory. We also found that for two of the three headquarters-level unit inventories we tested, the Property Unit had not validated the reconciliation submitted by the unit PCAs. As a result, the two units did not have a current, valid inventory of laptop computers.

Second, we determined that three individuals who assisted in the most recent physical inventory at one location had the ability to change the data contained in the property management system. The PCA explained that she was unaware of the need to segregate duties and she simply conducted the inventory according to training she said she
received.

Finally, the procedures used to take physical inventories of non-TEIS laptop computers were error-prone and more time consuming than necessary.26 We found the Property Unit provided printouts of inventory records to individual DEA units, who performed the physical inventory. Staff at the units took manual counts and made handwritten notations to the printouts to identify discrepancies or furnish explanations. No exception report was prepared. Instead, the DEA unit returned the printouts to the Property Unit, where Property Unit staff make adjustments to the FAS. The Chief of the Property Unit agreed that the current system was outdated and that the use of bar codes and scanners could result in more accurate inventories and take less time.

Disposals

Weapons: According to the Chief Armorer, who was responsible for excessing and destroying of DEA firearms, the General Services Administration must provide authorization before a weapon is excessed or destroyed. He explained that weapons that are disposed of are never deleted from the Weapons Database, but are moved to a new location within the database entitled "Destroyed" or "Surplused." Weapons are destroyed by being cut in pieces and melted down. Once the weapons are destroyed, the Chief Armorer notates the database accordingly and files an authorizing letter and other supporting documentation.

Generally, excessed weapons are given to other law enforcement agencies. The procedures for approval, and notation in the database, for excessed weapons are the same as those for destroyed weapons. We found that weapons excessed to law enforcement agencies were supported by proper documentation. However, we noted the DEA did not follow up with law enforcement agencies to ensure that shipped weapons were actually received. If weapons are stolen during shipment, a significant amount of time could elapse before someone at the receiving agency discovers that the
weapons from the DEA did not arrive.

Laptops: We did not note any problems with the DEA's procedures for the disposal of laptop computers. A DEA-120, Report of Excess Personal Property, is required to accompany a request for the disposal of laptop computers. The requesting office identifies the laptop computer for disposal and sends the request and DEA-120 to the Property Unit for approval. Prior to authorization for the disposal, the Property Unit receives concurrence from the IS Division as to whether to keep or dispose of the laptop computer. After IS provides the Property Unit with its recommendation, the Property Unit prepares a memorandum with a certification statement,27 which requires the requestor's signature. After the Property Unit approves the disposal, the requesting office disposes of the laptop computer.

Conclusion

General: A problem common to the accountability of both weapons and laptop computers is that the DEA's financial management system is not integrated with the property management systems under review. In our judgment, this condition increases the risk of fraud, waste, and abuse. Another problem common to both systems is that accountability for property retrieved from employees who leave the DEA is weak because the DEA's Employee Clearance Record contains insufficient detail on returned property.

Weapons: The DEA's inventory controls over weapons need improvement because: (1) updated property records were not always submitted timely, (2) duties for receiving weapons and entering them into the Weapons Database were not segregated, (3) duties for conducting inventories and reconciliations were not segregated, (4) a complete inventory of all weapons was not conducted in FY 2000, and (5) follow-up on the disposition of excessed weapons was insufficient.

Laptop Computers: The DEA's inventory controls over laptop computers also need improvement because: (1) conversion of the M-204 system data to the FAS caused errors, making the data unreliable; (2) technical problems with the M-204 system prevented the DEA from performing its 1999 biennial inventory; (3) the FY 2000 inventory was not validated by the Property Unit staff for two of the three headquarters units we tested; (4) the FAS was unable to track laptop computers by individuals assigned; (5) the FAS lacked the ability to automate the physical inventory and produce an exception report; (6) PCAs were not always notified of laptop computer purchases and assignments; and (7) duties for conducting inventories and reconciliations were not segregated.

Recommendations

We recommend that the Administrator, DEA:

Develop internal controls, operating manuals, audit trails, and system requirements appropriate to ensure the reliability of inventory data in the Weapons Database.

Ensure that a valid inventory is available to all PCAs, based on the completed reconciliation of FAS inventory records to correct the problems created from the
conversion from the M-204 system.

Integrate the DEA's financial system with the property management systems so that the inventory is routinely and timely updated when a weapon or laptop computer is
purchased.

Ensure that all purchases are entered timely into the FAS inventory.

Ensure that employees who receive shipments of weapons do not have access to the Weapons Database

.

Record in FAS the names of the individuals who are accountable for laptop computers instead of the names of the PCAs.

Ensure PCAs maintain adequate property records to show current assignment of laptop computers.

Ensure that field division level PCAs are advised timely by DEA headquarters of purchases and transfers of property items that pertain to their division.

Ensure that hand receipts for transfers are used throughout the DEA.

Ensure that details such as property descriptions, DEA property numbers, and weapon serial numbers are included on Employee Clearance Records.

Ensure that updates to the property system are made timely.

Ensure that the physical inventory of weapons is performed annually as required at DEA headquarters.

Segregate the duties of staff who take physical inventories, perform reconciliations, and modify the property management system.

Ensure that inventories are validated as required for each unit within DEA headquarters.

Ensure that confirmations from law enforcement entities are received and forwarded to the FTU when weapons are excessed.

Footnotes

A sample of DEA-17 is displayed at Appendix VI [Not available electronically].

DEA has designated a series of property accounts in FAS that identify the responsible office, such as each of the domestic and foreign divisions and various Headquarters units.

The DEA Property Management Handbook states that whenever property is received, the PCA should establish a file in which copies of all property-related documents are retained. Within 10 days of the receipt of property, the PCA should affix a DEA property decal to each item, and record the item in FAS.

This is the status given to unassigned weapons in the Weapons Database.

A sample DEA-16 is displayed at Appendix VII [Not available electronically].

A sample DEA-12 is displayed at Appendix VIII [Not available electronically].

DEA field offices and district offices may contain, in addition to the main field office or district office location, several
sub-offices and task forces.

This is the status given to weapons that are available for issuance upon request.

A sample DEA-171a is displayed at Appendix IX [Not available electronically].

The TEIS Inventories are taken with bar-code scanners, which quickly produce an automated printout of inventory exceptions.

This statement must be signed by the property custodial assistant of the requesting office to indicate that the disposal of the laptop computer was done in accordance with regulations, and all sensitive and classified information have been removed from the laptop computer.